SUBJECT: Report providing information on LED street light conversion program

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1 Page 1 of Report RPM TO: FROM: Development and Infrastructure Committee Roads and Park Maintenance SUBJECT: Report providing information on LED street light conversion program Report Number: RPM Wards Affected: All File Numbers: Date to Committee: March 22, 2016 Date to Council: April 11, 2016 Recommendation: For information only. Purpose: To provide an information report on a Light Emitting Diodes (LED) street light conversion program. The program aligns with Environmental Leadership under the Strategic Plan as well as the goals in the Corporate Energy Management Plan to improve energy efficiency and reduce greenhouse gas emissions. Background: The City s street light system is comprised of approximately 15,160 fixtures which consume approximately 10 million KWhr annually at a cost of $1.4 million. The system comprises of High Pressure Sodium (HPS) light bulbs of varying wattages. The 2016 budget for street light maintenance is $ 740,000 which includes, pole rental, relamping, underground locating and maintenance costs. The total 2016 street light budget (energy plus maintenance cost) is $2.14 million. Over the last several years, energy and maintenance costs have significantly increased and are anticipated to continue to rise. A number of street lighting technologies have been developed which provide dependable and energy reducing alternative to HPS fixtures. Municipalities throughout North America are investigating or have adopted street light conversion programs to reduce energy and maintenance costs. There are various lighting technologies available in the market; however, Light Emitting Diodes (LED) is the preferred alternative for

2 Page 2 of Report RPM municipal use. There are several municipalities within the GTA and surrounding area that have completed or partially completed LED street light conversion programs. These include Mississauga, Hamilton, Markham, Oakville and Halton Hills. In some municipalities, the conversion from HPS street lights to LED street lights have resulted in approximate 55 % in energy savings and a reduction in maintenance costs. There are a number of benefits with LED street lights: Meets illumination and uniformity light engineering requirements (RP-8) Dark Sky compliant Reduced ambient light pollution More accurate colour rendering than High Pressure Sodium (HPS) Quick turn on and off existing HPS requires warm-up period Reduced overhead light interference due to downward pointing shield fixtures Greater reliability and longer life cycle than HPS No associated hazardous designation with LED s Potential carbon reductions While LED technology has many benefits, the cost to convert the system is significant. Cost to convert to LED street lights The estimated cost to convert the entire street light system to LED is approximately $9.82 million. This includes replacement of the cobra head and decorative fixtures. The cobra head style fixture is common on arterial, collector, and local roads. The decorative fixture category includes post fixtures located in Downtown Burlington, and decorative fixtures support by a scroll arm in other areas. Many municipalities that have proceeded with conversion programs have deferred decorative fixture conversions due to the cost which can be approximately 2 to 3 times more per fixture than a cobra head. Also, there is need for further LED lighting technology improvements. Burlington Hydro has been mandated through the Ontario Energy Board (OEB) to achieve certain overall energy reduction targets by 2020 through their Conservation and Demand Management Plan (CDM). The City s LED streetlight conversion program would contribute to their CDM targets. Funding Incentives To assist municipalities, the Independent Electricity System Operator (IESO) is offering an incentive program for the conversion of HPS street lights to LED street lights. Based on the City s inventory of all street lights, the incentive program has been calculated at $1.078 million. Recent discussions at the IESO have indicated the street light incentive program is to be significantly reduced, possibly beginning Q2 (2016). This would have

3 Page 3 of Report RPM the potential of reducing the total incentive for the City of Burlington from $1.078 million to approximately $350,000 (68% reduction). Incentive Application Given the recent funding developments, Burlington Hydro staff has recommended the City proceed with the required application(s) to the IESO as soon as possible to mitigate the reduction in the incentives. Providing the City has submitted the application(s), Burlington Hydro, on behalf of the IESO, retains the applications at the higher incentive levels until the City is ready to proceed. The City can choose not to proceed with the application(s), or a portion, and can deactivate the application(s) in the future if necessary. Legal and RPM staff are working together to ensure that the city is not obligated to proceed with the applications and is not penalized, if Council ultimately does not approve of a program. Due to the nature of the incentive program, and general relamping logistics, it is anticpated submitting four (4) separate incentive applications in order to implement the conversion over a four (4) year period to coincide with the City s relamping program and distribute the costs while receiving the financial incentives at the conclusion of each application. Conversely, the submittal of one application for the entire city would defer a rebate opportunity until Discussion: Over the last three years, energy costs have risen on average 7% year over year. Monthly invoicing from Burlington Hydro comprises of fixed and variable costs of which 63% can be controlled by reductions in energy use. As a result, the variable component of the invoice would be impacted with an LED energy reduction program. On the maintenance side, there would be a reduction in maintenance costs due to the extended warranty period of the fixtures and no immediate need to relamp. The LED conversion program is presently not included in the 2016 Capital Budget and Forecast and will need to be prioritized with other funded and non-funded projects and programs as part of the 2017 budget process. Strategy/Process: Staff have established an internal working group with the intent of completing a detailed costing of an LED conversion program; financial impacts of the program and implementation strategy. The general schedule is as follows: Submission of IESO application for funding incentive Q1 Review Alignment with Strategic Plan and Corporate Priorities - Q2

4 Page 4 of Report RPM Financial Impacts, Analysis and Implications Q2 to Q3 Report to Committee Q4 Financial Matters: The total cost of a street light LED conversion program is estimated to be $9.82 million ( cobra heads plus decorative fixtures). With financial incentives, the cost could be reduced to $8.73 million. This cost has not been included in the City s 2016 capital budget and forecast and would require staff to consider a number of options in order to proceed. Although it may appear that an LED conversion program may decrease City s energy costs, a number of variables will require further analysis, i.e., future energy costs; suitability of the system to convert; and funding implications before recommending a program for implementation. Environmental Matters: The conversion of the City s HPS street light system to LED has a number of environmental and safety benefits including reduced energy consumption, lower carbon emissions, reduced ambient street light, improved colour rendition, reduced dark sky impact, and improved light dispersion onto the roadway and sidewalk. Public Engagement Matters: If this program proceeds, staff will work with Communications to develop a community engagement strategy to advise of the expected changes to lighting in the City s neighbourhoods and the benefits of the new street light fixtures. Conclusion: This information report provides an assessment of the opportunity for the City to apply for an incentive program for an LED street light conversion program. Due to the anticipated changes to the incentive program, staff has been encouraged by Burlington Hydro to submit applications to the IESO in support of the LED street light conversion program. Staff are ensuring that the applications can be deactivated or reduced without penalty, if at a later date, the City determines it will not proceed with the LED conversion program. A further report in Q4 will provide a more detailed business analysis.

5 Page 5 of Report RPM Respectfully submitted, Phil Antoniow, Manager of Program Development, Budgets & Contract ext Notifications: (after Council decision) Name: Mailing or Address: Approved by: Jeff Black, Acting Director of RPM Joan Ford, Director of Finance Nancy Shea-Nicol, Director of Legal Services & City Solicitor James Ridge, City Manager